Perfect Labor Storm 2.0 is a blog that highlights workforce trends, demographic shifts, and human resources changes that will change the way employers do business.

April 20, 2011

You would think that a headline screaming “Percent Working Lowest Since ‘83” would blame the recession, President Obama, or Congress. To many people, it would make sense. Someone has to take the fall. There was no reason to read further.

Unfortunately the headline does not tell the real story. So in the words of Paul Harvey, “here’s the rest of the story.”

While no one could argue that part of the reason for only 45.4 percent of Americans working in 2010 was the recession, the loss of jobs since 2007 only accelerated what many anticipated would happen regardless of the economy (including yours truly) – an overall decline in the percentage of working adults to dependents. Had employers, bureaucrats, and politicians paid the slightest bit of attention, this USA Today front page headline would be a mere footnote. The real truth is that the headline and story could have been written 20 years ago when this event was first predicted.

For example, the current percentage of Baby Boomers to U.S. population is 13 percent. By 2030, the number increases to over 20 percent of the population with 71 million people aged 65 or older. While Baby Boomers will work longer, they will work less … and collect Social Security and use Medicare. Eventually all Baby Boomers will become dependent on the working age population.

Since 1900, the number of older adults has increased eleven-fold, from 3.1 million in 1900 to 35 million in 2000. In 2010 one of every five employees was aged 55 or older. By the middle 21st century, there will be more seniors than children. That statistical milestone is less than 40 years away.

The statistics alone may be startling but a picture is worth a thousand numbers! In my book The Perfect Labor Storm 2.0 and hundreds of presentations about it, I use a population pyramid so demonstrate what’s happening to our workforce and why I’m shocked anyone continues to be surprised at headlines like the one published in the USA Today.

I also describe the population shift in this video.

My colleague John Sumser in a recent article also did a great job of describing the population pyramid. “For the entire history of the human race, with virtually no exceptions. the age distribution of population has had the shape of a pyramid. As people get older, there are fewer of them. The pyramid shape means that there are few old people and lots of young people. The older that people get, the more of them die.”

That population pyramid model lasted for centuries. But as he wrote, “important parts of our world no longer resemble a pyramid. While life expectancy was growing, the average number of people in a family has been declining rapidly...More old people and fewer kids (proportionately) means that the so-called pyramid no longer resembles a pyramid in the US and all of the industrialized world.”

That shift from a people pyramid to a silo means that the bulk of those people not working changed from children to adults. Not only does that imply more Social Security, Medicare, and pension costs, but fewer people working to support a growing dependent population. Likewise the cost of supporting more older people than younger ones has substantial economic implications, $500,000 caring for a senior compared to $125,000 educating a child.

This demographic shift is happening quicker too. In 2000 the U.S. had roughly the same number of children and non-working adults. Since then, the population of non-working adults has grown 27 million while the nation added just 3 million children under 18.

Age isn’t the only factor causing the lower labor participation rate. Men have been leaving the workforce for decades. In 1960, more than 80 percent of men worked. Today just 66.8 percent of men are working. Concurrently, the female participation rate jumped from 36 percent in 1960 to 56 percent in 2010. While the increase is certainly dramatic, lost in the translation is that the female participation rate leveled off in 1995.

The implications for employers are enormous. Shortages of workers moving forward will come in the form of quantity and quality. As challenging as recruitment is today, employers are just experiencing the tip of an iceberg.

April 18, 2011

The nightmare that is plaguing many companies as the economy recovers is the lack of skilled workers. There is no one cause for the shortages but a significant driver is the loss of Baby Boomer brain power. But the good news is that there can be a happy ending.

One company that is doing an exceptional job at managing their aging workforce is the National Rural Electric Co-operative Association (NRECA). I’m very proud to say that NRECA and many of their members have been clients of my company Success Performance Solutions for several years. So I was thrilled today when I turned the page in The Economist and saw their success story about how they are managing their aging workforce. The NRECA story isn’t only about well-deserved recognition but it serves as a model that other companies can use too.

The shortage of skilled worker problem is already acute in many industries like healthcare, aerospace, energy, and even technology. It has been exacerbated by a failure to plan, despite ample warning, about the impact of aging Baby Boomers. The article in The Economist cites The Sloan Centre on Ageing and Work at Boston College survey which found that 40% of employers worry that the ageing of the workforce will have a negative or very negative impact on their business. And yet despite this dismal warning, another survey last year by two British management institutes found that only 14 percent of managers think that their workplaces are prepared to cope with the greying of the workforce.

A significant number of older workers also became collateral damage as a result of how employers managed the recession. Many aging workers were forced to take early retirement while others were told to leave before the door hit them on their behinds. In either case, companies lost not only basic skills required to run their business but all the unwritten knowledge that swirled in and between the heads of veteran workers. Now many companies are finding that replacing one old body with a younger model isn’t very effective when life’s experience and maturity are ignored.

How did NRECA do it? First of all, they recognized that couldn’t change long-term demographic trends. They could however respond differently and more effectively. The NRECA chose to see older workers as part of their modern workforce, not drags on productivity and performance and costs associated with healthcare costs and benefits.

But setting the strategy and implementing well are two different things. After all the literature and Internet are filled with stories about the rigidity, curmudgeon attitude, and poor technology skills of older workers. References abound too how older workers just don’t have the physical ability to meet the physical requirements of many jobs. While that might be true, more jobs these days require more brain than brawn: according to the Urban Institute think tank, 46 percent of jobs in America require little if any physical demand.

And despite Millennials like Facebook CEO Mark Zuckerberg changing the way we communicate, several aging Baby Boomers like Steve Jobs (Apple). Larry Ellison (Oracle), and John Chambers (Cisco) can hardly be dismissed as non-relevant in the world of technology even today. Besides according to a recent study by the Kauffman Foundation, Americans aged 55-64 have launched more businesses than those aged 20-34 in every year since 1996.

But as The Economist author aptly notes, “None of this means that adjusting to an ageing workforce will be easy. Companies will need to rethink the traditional career ladder that linked seniority to pay and power.” They will also have to address the dramatic differences in work-life attitudes between the aging Baby Boomers, the trapped cohort of Generation X, and the emerging Generation Y workers.

The statement that caught the most attention was that companies and people must learn to “treat retirement as a process rather than a sudden event.” That solution seems to be a great fit for both the business that can’t afford to go cold turkey when a skilled Baby Boomer retires and for the Baby Boomer who willingly wants to continue working or is forced to work for financial reasons.

Congratulations NRECA! And for all the other employers who expect to remain in business have no choice but to learn how to deal with a rapidly aging workforce just like NRECA.

January 17, 2011

Today marks the celebration of Martin Luther King Jr. Day. We recognize the ever-changing demographics in our country, schools and work areas. These changes have influenced the way we relate to one another and how we do business. Based on the recent tragedy in Tucson and divisive political rhetoric, King's dream of "one day [living] in a nation where [everyone] will not be judged by the color of their skin, but by the content of their character” has not been realized. Managing diversity remains a business imperative.

An organization's success in managing and promoting diversity rests heavily on how well it harnesses the array of skills and experiences of its employees while they remain a part of its workforce. How good is it at fostering teamwork? Does it bring together people of diverse backgrounds and styles in order to enhance creativity, solve problems more effectively, and discover new approaches to old issues? The organizations must do all these things if it wants to achieve its goals and hold on to its best and brightest workers.

Many researchers and industry experts believe that the organizations that excel at managing diversity have six characteristics in common - six competencies form the foundation of a successful team of people who take pride in together achieving greater levels of success.

These six competencies are:

1. Awareness. Organizations and their employees develop and awareness of the benefits that can flow from cultural diversity, and establish and maintain a climate of mutual trust.(Watch this video! Diversity - Wake Up Everybody - Contact us for permission to use at your next workshop or training.)

2. Inclusion. Minority groups feel a part of and are included in the major decision-making processes of the organization. Their views and ideas are genuinely valued and seen to be important.

3. Tolerance and Understanding. Different beliefs, stated views, actions, and reactions are fully understood and are naturally tolerated and accepted as part of the rich overall "tapestry" of human behavior.

4. Empathy. Warmth, sincerity, and goodwill are extended to every individual and group without applying stereotypes, so that each person feels high levels of mutual empathy.

5. Adaptation and Change. Groups and the organization as a whole permanently adapt and change when bias or prejudice toward people who are different from the majority begin to hold back the organization or the work of individual employees.

6. Persistence and Commitment. Individuals and the organization as a whole persist in their efforts in their efforts to recognize diversity and cultural awareness shortfalls; commit to increasing overall knowledge; and seek to reap the long-term benefits from people's differences, rather than insist on similarity.

September 26, 2010

While the economy sputters, tensions heats up between the generations.

Lost in the diversity of generational news last week was a common element – the generations are struggling to right themselves following the recession and going forward.

The just released cover story of October’s The Atlantic magazine talks about the Baby Boomers’ last chance to redeem themselves after what the writer Michael Kinsley describes as decades of self-absorbed and self-indulgent behavior.

The postwar generation is leaving a bitter legacy: crumbling infrastructure, crushing public debt, and a reflexive cynicism about all institutions, from churches to Congress to the media. It’s time for redemption…Kinsley urges fellow Boomers to cough up some cash—say, $14 trillion—to fix the mess they’re leaving.

That could be a problem. Boston College's Center for Retirement Research released a study last week too that exposed a retirement income deficit that few people likely found surprising. The gap between what Americans need for retirement and the amount they have saved is a staggering $6.6 trillion.

“The retirement income deficit is the gap between the pensions and retirement savings that American households have today and what they should have today to be on track to maintain their living standard in retirement,” said Karen Friedman, executive vice president and policy director of the Pension Rights Center. “The retirement income deficit shows just how bad the crisis has become.”

If Baby Boomers can’t maintain the lifestyle they’ve grown accustomed to, they will likely keep working. An article in Fast Company last week offered harsh realities that have stymied Generation Y (also called Millennials). Topping the list was: The Baby Boomers are not voluntarily leaving the workplace! :

The Recession has decimated the Boomers’ opportunity to retire and left them with no choice but to continue to work for the foreseeable future. And, because Boomers are living during a period when medical science is going to continue to improve their ability to be healthy and work, that “foreseeable future” is a lot longer than anyone could have imagined!

Not only are the Boomers going to remain in the workplace but they are also going to retain their positions of authority…If they are forced out of their current employment positions, Baby Boomers will actively compete with the Millennials for other jobs!

And despite being recognized as “digital natives” and the “Internet Generation,” the advantage these young Gen Y adults may be dissipating with time. The fourth harsh reality describes

“...how the Technological Edge the Millennials touted as the differentiator between them and the other Generations in the workplace is diminishing as the other Generations, faced with no choice, close the technological gap. Boomers may never be able to text as fast as Millennials but they will be able to text fast enough for the workplace! And Boomers have the interpersonal skill set to go with the texting skill set!”

Putting the shrinking technology gap into perspective, one group wonders if the technology gap is myth or reality. The author says “I find that Millennial (Google Generation) students have the fastest thumbs in the west and can answer a cell phone call at the speed of light. Beyond this, their technology related skills, from an academic perspective, seem quite limited.”

This was also the topic of conversation before and during a panel discussion last week at Harrisburg University. While all the panelists agree that Generation Y are the most comfortable generation using technology, they may not be the most skilled at applying it in the workplace.

Of course, the more imminent impact of the recession and delayed departure of Baby Boomers will be felt by Generation X. Kinsley wrote in a forum response to his Atlantic article how “Gen-Xers are going to get screwed by [the entitlements and debt government is accumulating] even more than Boomers as the bills come in.”

And while the bills could be huge, the impact on society could be even bigger.

Education is often prescribed as the solution to society’s ills and as the pathway to regaining our competitive position in the global marketplace. If the prescription is correct, then the patient is dying based on a new report, Yes We Can: The Schott 50 State Report on Public Education and Black Males 2010. Calling it a "national crisis," the report found that only 47 percent of black males graduated from high school in the 2007-2008 school year. And in New York City, the district with the nation's highest enrollment in African American students, only 28% percent of its African American males students receive a high school diploma.

Poverty and poor graduation rates are unlikely to significantly increase tensions between generational gaps in the workforce. But ignoring these problems will only add to the burden borne by future generations who will need to figure out ways to support millions of people who are unemployable.

In the short term, the longer unemployment remains high the more resentment will likely build between generations both in the workplace and in our communities.

If it weren't for us baby boomers, most of you wouldn't be here. Literally.

We are your parents. You sprung from our wombs, from our love.

We don't just deserve your respect; we deserve your eternal gratitude — for the food you ate, for the clothes you wore, for the roofs over your heads. By the way, we're still giving food, clothes and roofs to the more than 10 million of you who still live in our homes.

And what have you millennials — the 50 million Americans born between 1980 and 1995 who are becoming adults at the start of this new millennium — given us?Nada — except the smug expectation that we should give you more.

How ungrateful can you be?

In the other corner is Millennial (aka Gen Y) Timothy Malcolm. Timothy has quite a different opinion. He urges Baby Boomers to “Give up the reins, you geezers.”

Timothy wrote:

The main reason we 20-somethings still sleep at mom's house is because mom and dad won't get out of the work force. They're clogging the pipeline.

Baby boomers make up the largest generation in American history. The current 20-something generation is almost as large, ironically, thanks to the boomers having all those kids.

Because of improvements in health care, boomers are not only living longer, but they're subjected to the salacious whispers that, yes, even in old age, they can remain vital! They can keep working, climb mountains, row boats and — gasp — have sex! Think about Lucy and Ricky or Archie and Edith cavorting in beachside bathtubs. Yeah, it is ridiculous.

Sure, we 20-somethings have some ridiculous traits, too. We waste time on Facebook, but as one of the original users, I've seen the boomers completely ruin that social networking site. Our music might be hard to understand, but at least I can't take credit for Cher. And, seriously, when are the Who going to stop?

So far, the first round of the attitude gap between Baby Boomers and Millennials has been subdued and mostly a war of words. But as the recession lingers on and Gen Y joblessness remains high, one can only wonder if the resentment building up will boil over in a full fledged battle.

The hottest growth segment on Facebook and other online social networking sites is guys like Richard and Ray and their lady friends. No, Richard and Ray aren’t two college kids enjoying the party life.

Richard and Ray are what most people might call “geezers.” In fact, these two gentlemen are members of a special group of the elderly population. They belong to the “oldest old” group – Americans who are at least 85 years of age.

And that’s what makes this story so interesting. Richard Bosack, age 89, joined Facebook recently, after his buddy Ray Urbans, age 96, recommended the ubiquitous social networking site a few days earlier. (And I’m still trying to get quite a few 50- and 60-something neighbors to check their emails regularly!)

The two older men might be viewed as exceptions in a space that is considered the proprietary realm of teens, young adults, and moms. But Grandma and Grandpa are joining Facebook and other social networking sites in record numbers. As the Pew Research Center recently described this trend, Grampy and Grammy are getting down with "the Face."

Social networking use among Internet users 65 and older grew by a staggering 100 percent in the last year, a recent Pew Research Center survey reports. In 2009, social networking use by folks 65 and older stood at 13 percent. This year, 26 percent of people in that age group who are using the Internet also are delving into Facebook and other social networking sites. Social networking use among internet users ages 50 and older nearly doubled—from 22% in April 2009 to 42% in May 2010.And it’s not only social networking sites that are attracting seniors. Looking at adults ages 65 and older who have high-speed internet connections at home, 72% say they use the internet on a typical day. That compares with 77% of broadband users ages 50-64, 84% of those ages 30-49 and 86% of those ages 18-29.

Tammy Gordon, AARP's senior adviser for social communications, says a quarter of the organization's members are using Facebook, and the number is rising quickly. Nearly 19 million people ages 55 and over used Facebook in July, up from about 9 million one year ago, according to comScore.

“Young adults continue to be the heaviest users of social media, but their growth pales in comparison with recent gains made by older users,” explains Mary Madden, Senior Research Specialist and author of the report.

What does the 60 and older crowd find so appealing in social networking?

1. Older Social networking users are much more likely to reconnect with people from their past, and these renewed connections can provide a powerful support network when people near retirement or embark on a new career.

2. The appeal of social networking for older Americans may also be related to managing health issues. Older adults are more likely to be living with a chronic disease , and those living with these diseases are more likely to reach out for support online. Having a chronic disease significantly increases an internet user’s likelihood to say they work on a blog or contribute to an online discussion, a listserv, or other forum that helps people with personal issues or health problems.

3. Most older adults have been introduced to social networking by their children. Social media bridges generational gaps. While the results can sometimes be messy, these social spaces pool together users from very different parts of people’s lives and provide the opportunity to share skills across generational divides. This has the potential for strengthening family ties and work relationship across generations.

One idea circulating around is to support a “National Digital Literacy Corps” that trains volunteers to teach digital skills to those who are least connected in their communities—including pairing tech-savvy digital natives with seniors. With 86% of internet users ages 18-29 using social networking sites and 60% doing so on a typical day, it is not hard to imagine that some of these young mentors would be eager to share their skills in profile management with older users.

Mark H. Ayers, President, Building and Construction Trades Department, AFL-CIO, disagrees. In his post on the Huffington Post Blog, Ayers claims that "is suspect from the start due to its source. Secondly, the brain trust at Manpower, Inc. is apparently unaware that there is 20% unemployment right now among the skilled trades in the United States (and in many areas of the nation, the rate is above 30% and sometimes 40%). Third, the term "strategic migration" is simply a more elegant way to say that American employers - not all American employers, mind you, but a significant number of them - are chomping at the bit to ease immigration restrictions for guest workers so that they can pay less for skilled craft labor."

Ayers is absolutely correct about (1) the source of the study, (2) 20% unemployment is real, and (3) many U.S. employers are cheap SOBs looking to hire workers willing to work for the least amount of money.

But his position ignores the harsh reality of today's re-structured economy and job market. Twenty percent unemployment in the skilled trades doesn't mean that 1/5 of those workers seeking employment are qualified. The recession no doubt was an excuse for many organizations to do what they could have done years earlier. To avoid political fall-out of layoffs, outsourcing, or automation, they kept doing what they always did. Business expected the consumer to pay for complacency and bad business practices. When the bubble burst, businesses found themselves with a lot of under-skilled, over-paid workers in jobs that time and automation replaced. Many unemployed workers who simply enjoyed a middle class lifestyle for several decades on entry-level skills and earned the title of "skilled worker" don't qualify for available jobs today.

The Manpower report, despite its bias, does expose a serious structural change in our economy that is ignored when leaders like Ayers attempt to shift the argument from a lack of skilled workers to immigration. Immigration and the inability of many workers to find jobs are related but not cause-and-effect.